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Eaton (ETN) Acquires 82.275% Interest in Ulusoy Elektrik

Zacks Equity Research

Eaton Corporation ETN announced that it has completed the acquisition of an 82.275% controlling interest in Turkey-based Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S. (Ulusoy Elektrik). The company had announced its intention to buy Ulusoy Elektrik in November 2018.

Ulusoy Elektrik, which has manufacturing facilities in Turkey and Indonesia, deals in products that include medium-voltage switchgear, medium-voltage distribution transformers, substation kiosks, and medium-voltage cable connection systems.

The acquisition of Ulusoy Elektrik is a strategic fit for Eaton. This buyout complements its services that are spread across 175 countries. Ulusoy Elektrik exports products to more than 70 countries across the globe. The acquisition of Ulusoy Elektrik will allow Eaton to sell electric products of different varieties to existing customers.

Eaton’s Long-Term Plans

Eaton’s strategic acquisitions allow it to foray into new markets and enhance revenue stream. The company expects organic revenue growth of 4-5% in 2019, driven by strong contribution from all segments, except the Vehicle segment.

Courtesy of improving end-market conditions, the company continues to receive strong bookings for majority of its segments, in turn positively impacting its performance.

The company continues to make steady investment in research and development activities to churn out new electrical products, which will help reduce energy consumption and carbon emissions. Thanks to increasing demand for its products, Eaton expects organic growth in the range of 4-5% in 2019.

Price Performance
Shares of Eaton have outperformed its industry in the past six months.

Zacks Rank & Key Picks

Currently, Eaton has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same industry are UQM Technologies UQM and Regal Beloit Corporation RBC. While UQM Technologies sports a Zacks Rank #1, Regal Beloit has a Zacks Rank #2 (Buy).

UQM Technologies reported positive earnings surprise of 80% in the last reported quarter. The Zacks Consensus Estimate for 2019 and 2020 has moved up 55.5% and 25% year over year, respectively, in the past 60 days.

Regal Beloit reported positive earnings surprise of 4.27% in the last four quarters. The Zacks Consensus Estimate for 2019 has moved up 0.2% to $6.43 per share in the past 60 days.

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